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    Insurance stint inspired foray into realty: Jaggannathan

    Having transitioned from the secure milieu of an insurance major after close to a decade-long service, V Jaggannathan decided to take an entrepreneurial plunge – in Chennai’s realty space in 1986. He has helped shape the fortunes of Ramaniyam Real Estates (P) Ltd, that today has an annual turnover of Rs 300 crore.

    Insurance stint inspired foray into realty: Jaggannathan
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    V Jaggannathan MD, Ramaniyam Real Estates

    Chennai

    With a customer-centric approach, the company forayed into commercial real estate projects too. Jaggannathan has helped deliver over 4,000 residential units spanning 75 lakh sq ft, apart from 212 commercial real estate ventures. 

    During his seventh year in New India Assurance, the company announced a housing loan scheme for Rs 1.25 lakh at an interest of 2 per cent p.a. Along with four friends, Jaggannathan scouted a plot for Rs 80,000 in the now upmarket Valmiki Nagar, Thiruvanmiyur. Although he had mobilised Rs 20,000, within a week, the trio backed out. “I was stuck with a property and I highlighted my plight to the owner,” he says.

    The owner, who had already spent the Rs 20,000 given by Jaggannathan, asked him to repay the money within six months instead of the original three months. Egged by an insurance customer who gave him the assurance of getting the Corporation’s approval, Jaggannathan submitted a scheme to the Corporation authority for a four-flat project (ground + one floor). “That was the first time, Ramaniyam advertised for a 4 in 1 flat for sale in Valmiki Nagar. On the same day, I got three customers,” he says.

    To his surprise, he found that post construction, the cost of the fourth flat came to zero. “I realised that with just 6 months of work, I could earn Rs 2 lakh. So, why would I waste my time in the insurance business,” says Jaggannathan. The need to grow led him to finalise a property for Rs 11 lakh.

    “I bought five grounds in Valmiki Nagar and unlike the first approval from the Corporation, I did not know about the MMDA criteria for a six-floor building. There was also a 500 metre-ban based on Coastal Regulation Zone (CRZ) criteria. So, though the MMDA accepted my proposal, it could not be processed. When I asked my father, he suggested I seek divine intervention,” he goes on to say. Soon enough, the then Prime Minister Indira Gandhi passed an order wherein city limits were brought down to 200 m against the original 500 m classification. 

    Ramaniyam’s ‘Oval’ project in 2003 marked his foray into commercial realty. “A client returning from the US with plans of setting up a big IT company, saw the 60,000 sq ft building maintained by us and decided to lease out the whole building.” But since the US company required 1.5 lakh sq ft on a long-term basis, Jaggannathan, who was then negotiating a property (for building a 2.5 lakh sq ft commercial project) on the Guindy Main Road, near Kasi theatre, showed him the latter. “I offered them 1.5 lakh sq ft, at Rs 25 per sq ft. They gave us a 15-month deposit instead of 10 months,’ which is the money I used to buy the land. After 5-7 years, most of the US firm’s senior management staff too became my residential clients.” 

    Though the prevailing market rates were far higher, the decision to offer it for Rs 25 without any price revision, proved to be advantageous. The next deal that came along was Virtusa. “The project gave me visibility in the market and I have never looked back since then,” he signs off.

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